Thoughts from your Board: Our Prices and the Cost of Good Food

By Lisa Barclay, Board Secretary

As the board secretary, I’m responsible for answering notes, letters, and emails sent to The Food Co-op board. This month there were only two notes and both were anonymous, so I couldn’t reply directly, but since both were on a topic that comes up a lot—prices—I’m using our blog to talk a bit about it.

The first note suggested that now that we were having $10,000 sales days, we should lower prices to help members on lower incomes. The second note asked why we hadn’t instituted the Centsibles program a long time ago. As you can see, in a way, the second note answers the first!

1% Profit

Why don’t we just lower the prices all around? Well, we only make about a 1% profit, so even if we lowered prices across the board to make 0% profit, it would not make a very noticeable difference in any particular item. And we have to make a little profit in order to be prepared for inevitable but unpredictable costs like refrigerators giving up the ghost prematurely. We save most of what is left at the end of the year for future improvements, but our new member patronage dividend plan will allow us to give some of it to our members.

Kudos to Centsibles!

To answer the second note about why didn’t we institute Centsibles earlier? We did. Well, actually, we had a similar but smaller list for years of staple items we sold just above cost. But members didn’t always notice the signs indicating these items, plus we wanted to expand the number and types of foods so that a person could cook three meals a day with them. So we came up with 60+ items of the Centsibles program and Mindy made beautiful—and large—signs to mark them in the store.

Why 1%—Where Does the Money Go?

After the cost of goods, our largest expenses by far are for our staff—wages and benefits—then the building and equipment, and finally, taxes. It takes a lot of people to run a store, plus our owners expect more from their co-op staff than from a conventional store. And we have a great staff. I’m always amazed by the lengths they go to help members—Katy describing how to cook gluten-free pasta or Rodney explaining the difference between cultured and non-cultured butter—and members posing questions they could never ask at a conventional store, as when the person in line behind me asked Charlie if he knew anything about making one’s own kefir. Or there’s cheese maven Josephine, who borrowed a book on wines from the deli manager so she could help owner-members choose a wine to go with their cheese (or anything else).

Organic Apples to Apples

When we’ve paid our expenses, we have just that 1% or so. Then why do prices seem high compared to conventional store? Well, often they aren’t. We regularly compare our prices with the big stores, and we generally do pretty well, considering we don’t have anything like their buying power. If you compare apples to apples—that is, organic to organic—our prices are competitive and sometimes even better. And our local produce is truly local, the farmers deliver it themselves!

Government Subsidizes Conventional Foods

For packaged goods, we are at a disadvantage for two main reasons. First, large stores and chains have much more buying power than we do, so they pay lower prices for goods from the start. Second, the federal government subsidizes corn and soy, and since most conventional packaged foods contain one or both of these ingredients in some form, they are much cheaper than organic. The government actually penalizes organic farmers by making them jump through a lot of hoops as well as pay for certification. Since the government started subsidizing corn and soy, the price of packaged foods has gone down around 40% and real food has gone up around 40%! That is why soft drinks are cheap and one reason diabetes rates have sky rocketed. It would be great if the government subsidized healthy food from the start instead of big mono crops like soy and corn, but they don’t, so as shoppers, we have to make choices.

In the mean time, The Food Co-op will continue to work to keep a wide selection of foods as affordable as possible.

Join the discussion!

The Food Co-op board will be hosting a series of presentations and discussions this fall around these kinds of topics, so keep an eye on the Board’s board and calendar for dates, and come join us. Topics include:

September – Co-op Finances: What do those numbers in the annual report mean? September 22 at the Co-op Annex, 6:30 to 8:30pm.

October—Organic or Local: Which is Most Important? (hint: it depends…). Date/time TBD

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on Thursday, August 6th, 2015 at 2:20 pm and is filed under Port Townsend Food Co-op.
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